Home Shortage

Sunday, February 19, 2017

The Housing White Paper has heavily featured in the news this week and the conclusion is that severe shortage of homes has led to broken property market. This diagnosis has led to some solid changes to rectify the situation.

Developments on disused land, discounted starter homes and fairer rules for renters will attempt to target soaring property prices and the huge gap in housing supply faced by a growing population

England's housing market is broken, admits the Government in its much-anticipated Housing White Paper, and the reason is simple: "For too long, we haven't built enough homes."

Communities Secretary Sajid Javid said he was setting out “proposals to help fix the housing market so that more ordinary working people from across the country can have the security of a decent place to live”.

Commenting on the White Paper, Richard Snook, senior economist at PwC, says: “While the paper includes a raft of new measures, the absence of change in key policy areas is perhaps more striking. There appears to be no major new initiatives on tax, the greenbelt or enabling local authorities to borrow to build."

In the 104-page report, new reforms sit alongside existing policies, although most of the detail on how the proposals will be implemented is still to come.

Points covered in the Housing White Paper:

1. Identify areas where housing is needed most
Councils will be required to produce a realistic plan for housing demand and review it at least every five years.
2. Protection of the green belt
Commitment to the green belt is confirmed: "Only in exceptional circumstances may councils alter green belt boundaries."
3. Build higher where necessary
Councils and developers will be expected to build higher-density homes in areas where there is a shortage of land and in locations well served by public transport.
4. Speed up house building
Developers will be required to start building on land where planning permission has been granted within two years, rather than three years, or permission will lapse.
5. Encourage more house builders
As 60 per cent of new homes are built by just 10 companies, the Government will back small independent builders through the £3 million Home Building Fund.
6. Help first-time buyers on to the ladder
Those hoping to see relief on stamp duty charges to stimulate the property market will be disappointed.
Existing schemes such as Help to Buy will continue and a plan to offer discounted starter homes will be launched. Such starter homes will have a 15-year repayment period and if they're sold within this time some or all of the discount must be repaid in order to discourage speculative purchases.
In April, the Government will introduce a Lifetime ISA to help first-time buyers save for a deposit. On savings of up to £4,000 a year, the Government will pay in a 25 per cent bonus.
7. Make renting fairer for tenants
The report confirms that letting agent fees to tenants will be banned "as soon as parliamentary time allows", to give renters greater clarity and control over what they pay.
The Government is also proposing to make the private rental sector more family-friendly by promoting longer tenancies, in order to avoid frequent high moving costs and saving children from having to change schools often. The Government also aims to offer longer leases on homes supplied through housing associations and institutional investors.
The Affordable Homes Programme will also be opened up to include affordable rent.
8. Encourage build-to-rent homes
Planning rules will be amended to make it easier for councils to plan more long-term build to rent homes.
9. Leasehold fees and charges
Consultation will be held on a range of measures to "tackle all unfair and unreasonable abuses of leasehold", including uncontrolled ground rent rises.
10. Make the best use of existing homes

The Government also aims to consider the shortage of homes for older people - or last-time movers - including retirement housing, in order to release more family homes on to the market for younger buyers.

This is obviously going to take time for the changes to be implemented so what does it mean for now? Well, the essence seems to be if you have a house to sell – there are plenty of people queuing up to buy it.

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